Mrs. Green is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $.60 per bottle and $.40 per bag respectively. It can be concluded that:
A) the two commodities are substitute goods.
B) Mrs. Green should spend more on pretzels and less on soda.
C) Mrs. Green should spend more on soda and less on pretzels.
D) Mrs. Green is buying soda and pretzels in the utility-maximizing amounts.
Answer: C) Mrs. Green should spend more on soda and less on pretzels.
Economics
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